ASIC had to fix Bankers Homework
Today’s announcement that the new Banking Code of Practice has finally been signed off by the Australian Securities and Investments Commission (ASIC) is a welcome development.
This Code of Practice updates the previous code signed off by the banks, aimed at settling rules for banks around ethical behaviour, responsible lending, financial protection and increased transparency. And what a success that has been.
All very familiar, reoccurring themes for those who have been following the Banking Royal Commission closely.
A Banking Royal Commission that took more than 600 days for the current Government to commit too, a Banking Royal Commission that was announced on 14 December 2017.
The Australian Bankers Association (ABA) submitted its new code of practice to ASIC on 19 December – what a coincidence!
Given it’s taken 8 months for ASIC to approve the Banking Code of Practice, clearly even this new code required added toughening up.
I’m sure the horrifying revelations we have heard in the Banking Royal Commission has seen the regulator have to go back to the drawing board more than once on this new code.
But the delay in this new code is a delay in better protecting banking customers.
This Code of Practice is allegedly enforceable and banks will be required to sign up to the Code in order to be a member of the ABA.
The question now must be asked though, how can the regulator, ASIC, who has been subjected to a $26 million funding cut, truly have the capacity to enforce and penalise this Code?
The Turnbull Government tried to look tough on the banks but in reality is undermining banking regulation at the same time.
Only Labor will continue to work to ensure the Royal Commission delivers justice to the pensioners, families and small businesses that have suffered because of the misconduct in the banking and financial services sector.